Deposit for office lease - VAT ?

[Spapro]

Hi,

we have just signed up for our first office, moving out from the home office .

We have received 2 invoices from our new landlords:
Invoice 1 - first months rent + VAT
Invoice 2 - deposit + VAT

Should the deposit invoice have VAT added ? not sure as they are effectively 'holding' the money until we move out and we get it back at the end so there is no 'sale' involved (assuming no damage etc).

 

[Scalloway]

Have a read of this thread from Accounting Web

http://www.accountingweb.co.uk/anyanswers/can-you-reclaim-input-vat-payment-rent-deposit

 

[deniser]

What does your contract and rent deposit deed say about the deposit amount? Does it say you should pay a fixed sum or a fixed sum plus VAT? It really does depend on the wording of the documents as to whether you hand over an amount equivalent to the rent plus VAT or just the rent.

 

[Spapro]

Thanks for the link deniser, interesteing reading, we do have a VAT invoice so we will claim the VAT back on our input VAT.

So, I guess its not a biggie, although not having this little bit added ontop would help a little with cashflow at a time where we have these initial expenses for moving into the office (every little helps !).

Just wondered if the VAT should be charged on the deposit, assumed it would be a black and white answer, either should or shouldn't be charged. Another grey area then :|

 

[Spapro]

What does your contract and rent deposit deed say about the deposit amount? Does it say you should pay a fixed sum or a fixed sum plus VAT? It really does depend on the wording of the documents as to whether you hand over an amount equivalent to the rent plus VAT or just the rent.

On the lease:

The rent is shown as '£xxxx.xx per annum (plus VAT)'

The deposit is simply shown as '£xxx.xx'

The deposit amount of £xxx.xx is 1 months net rent (ie. no VAT)

The landlord has been really very good with us, we can pickup the keys a week earlier than the date we start paying rent and they are providing a bit of spare furniture they have FOC to help us out.

I do not want to sour the relationship early on by knitpicking wording on the lease etc to save what is a small amount of VAT we can claim back anyway !

Thanks for the advice anyway.

 

[deniser]

On the lease:

The rent is shown as '£xxxx.xx per annum (plus VAT)'

The deposit is simply shown as '£xxx.xx'

The deposit amount of £xxx.xx is 1 months net rent (ie. no VAT)


I do not want to sour the relationship early on by knitpicking wording on the lease etc to save what is a small amount of VAT we can claim back anyway !

Thanks for the advice anyway.

Well you shouldn't be paying it then. It's not really nitpicking......

 

[woodss]

That's not nitpicking, it's called not being ripped off (whether accidental or not) - would they pay you back the VAT when it comes to returning the deposit? Heh.

 

[lucaandrew]

Hi.Recently I leased a small b&b and the landlord wants to charge me vat on the rent...is it normal to do that...when we made the contract nothing was mentioning about the vat.
I am VAT registered.

 

[BobBuilder]

Hi.Recently I leased a small b&b and the landlord wants to charge me vat on the rent...is it normal to do that...when we made the contract nothing was mentioning about the vat.
I am VAT registered.

If the contract and any other contracts or lists of conditions to which it refers makes no mention of VAT, then you should take the stand that any payments due and/or paid are inclusive of any VAT due

You might also wish to explore this matter on the Legal forum rather than the accounting one.